between $1,000 - $9,000) and will later reach out to those who applied for EIDL assistance on or before December 27, 2020 but did not receive an EIDL advance due to lack of program funding. Borrowers must make a good-faith certification that the PPP loan is necessary and should document those needs with the filing of the application. There are some exceptions, such as for a business with more than 500 employees that is considered small under SBA Size Standards. No. This means that a borrower that chooses to file before the end of the Covered Period cannot contact the lender at a later date to mitigate any salary reductions after the loan forgiveness application has been filed. I am a Paperless Agent member. Construction and real estate SBA Covid-19 EIDL Loan Collateral and Personal Requirements SBA Covid-19 EIDL Loan Collateral and Personal Guarantee Requirements Address: 1016 E Osceola Parkway, Kissimmee, 34744, Florida, United States Phone: 407-502-2400 E-mail: info@freedomtaxfl.com Freedom Immigration Freedom Insurance & Financial Multifamily Minute Reader Reflections: How Will You Address Vacancy in 2023? Economic Injury Disaster Loans (EIDLs) are targeted, low-interest loans to small businesses that have been severely impacted by the coronavirus. SBA will, subject to any SBA review of the loan or loan application, remit the appropriate forgiveness amount to the lender, plus any interest accrued through the date of payment, not later than 90 days after the lender issues its decision to SBA. If this amount is over $100,000, reduce it to $100,000, if this amount is less than zero, set this amount at zero. When can I submit my loan forgiveness certification or application? Many real estate agents may find that the SBA 7(a) program, the Small Business Administrations most commonly used loan program, is the best fit for their needs. Calculating how much youre entitled to as an independent contractor has a formula to it. For second draw PPP loans of not more than $150,000, borrowers must submit documentation sufficient to establish that they experienced a reduction in revenue. We have not reviewed all available products or offers. Thus, most real estate industry borrowers should be able to truthfully certify that they were unable to operate at the same level of business activity during the Covered Period as they were able to prior to February 15, 2020. There are 2 programs, that we can take advantage of as real estate agents, that allow us to continue to operate despite what's going on: Because of the new legislation, independent contractors and sole proprietors now qualify to take advantage of these programs! Use of funds was expanded to Many major lenders are currently only assisting borrowers who already have a business checking account with them. I tried to apply for a PPP loan at my bank, but the bank refused to consider my application or rejected it. I heard that the SBA was offering EIDL emergency grants of up to $10,000 that did not need to be repaid. This is because 7(a) loans can be are incredibly flexible, and can used for working capital, equipment, and owner-occupied commercial real estate. Note: Since SBA allows borrowers to use 2019 or 2020 payroll costs to calculate their maximum PPP loan amount for both first and second draw PPP loans originating in 2021, borrowers will want to use the year in which their payroll costs were highest to obtain the largest PPP loan amount. However, keep in mind that CPAs are allowed to charge fees for advisory services, such as helping you decide which COVID-19 relief program is the best fit for your needs and circumstances. In order to qualify for an SBA 504 loan, businesses must meet a strict set of eligibility requirements: In addition, the prospective borrower applicants must: Real estate agents can take advantage of the Small Business Administration's (SBA) loan programs to help fund their business. SBA 7(a) loans for working capital and equipment have terms of up to 10 years, while SBA 7(a) loans for commercial real estate loans have terms of up to 25 years. Applications for the program must be submitted through a Community Development Financial Institution (CDFI) that has partnered with the state of California to distribute the funds. The only portion of the loan that was able to be forgiven was the advance, which is no longer available. If you would like to submit content or write an article for the Real Estate & Land Use Section, please email Kara Sikorski at ksikorski@indybar.org. With funding still available and a December 21, 2020, deadline rapidly approaching, it might be time to find out a little more about the EIDL loan. To apply for forgiveness of your PPP loan, you must complete the certification and submit it to your lender. Will I need to pay income tax on the PPP loan proceeds if I use the proceeds for income replacement? What is an Economic Injury Disaster Loan, and who qualifies? Thus, if you are a Schedule C filer whose gross income is greater than $150,000 and you apply for a PPP loan, the SBA may send you a Loan Necessity Questionnaire to verify that current economic uncertainty made the loan request necessary to support the ongoing operation of your business. For example, if youre qualified to borrow up to $50,000, you can change that amount to the amount you wish to borrow, up to $50,000. If the first disbursement is not made within 90 days from receipt of an SBA loan number, the EBL loan will be canceled. For rent or lease payments: Copy of current lease agreement and receipts of cancelled checks verifying eligible payments from the Covered Period. They want to know all of your debts. It was very helpful.I have applied for both loan. 2070 0 obj <>stream This powerful tool is de, If you're a real estate agent, chances are you've heard about the "Big Three" of real estate marketing: buying online leads, door knocking, and cold calling. The remainder of the loan that is not forgiven (if any) will operate according to the loan terms described in the Loan Terms section above. EIDL loans are 30-year loans with an interest rate of 3.75%. Loan forgiveness means that you are not required to repay your loan. Standard SBA Loans are not available for passive income (except Hotels and Self Applying for the EIDL does not restrict your ability to also apply for the PPP if you are eligible for both. These companies are not in any way reviewed, supported or endorsed by C.A.R. These lenders will be handling the PPP application process. For example, if youre looking to change your business structure from a sole proprietorship to an S corporation, you will first need the approval of the SBA. You cannot apply for PPP loans on the SBA website. Its a time for family, friends and creating lasting memories. Schedule of liabilities for a real estate agent : r/EIDL - reddit For small businesses impacted by COVID-19, an EIDL offers some distinct advantages that you should take into account when deciding whether to pursue the loan. SBA Express Loans, SBA 504 Loans, According to the Department of the Treasury, the lender must make the first disbursement of a PPP loan no later than ten calendar days from the date of loan approval. The SBA instituted this rule to serve as an additional deterrent to fraud, waste, and abuse. buHX M@B `l&FZ#R ?a I have followed up, but to no avail Hi Vince! eidl for real estate agents Any forgiven PPP loan proceeds do not need to be reported as gross income by the borrower for federal and state income taxes. No. Since then "crickets", and no $$$ in my bank account. and Schedule of liabilities for a real estate agent . What are the eligibility requirements for the program? Additionally, borrowers can obtain full loan forgiveness if they were unable to operate between February 15, 2020 and the end of the Covered Period at the same level of business activity as before February 15, 2020 due to COVID-19 related operating restrictions, as long as they do not reduce salaries or hourly wages by more than 25 percent for any employee during the Covered Period compared to the period between January 1, 2020 and March 31, 2020. The funds can be used for land, improvements, construction, retrofitting, and more. There remain many ambiguous provisions in the laws that continue to be clarified by rule-making at the federal and state agencies. The EIDL loan proceeds may be used for working capital purposes, including payments of fixed debts, payroll, and accounts payable. If youre an independent contractor, you may be Since real estate agency is a personal service business (which makes cost of goods sold inapplicable for most brokers), brokers should typically be able to use gross income or total income (for a firm) to determine their gross receipts for a quarter. The Express Bridge Loan (EBL) program authorizes SBA express lenders to provide expedited guaranteed bridge loan financing on an emergency basis for disaster-related purposes to small businesses (including sole proprietors, independent contractors and other self-employed individuals) while those small businesses apply for and await long-term financing. Proceeds must be used for purposes approved by the SBA, which include: Improvements to property such as utilities, parking lots, street enhancements, and landscaping, Constructing new facilities or modernizing/renovating existing facilities, Buying machinery and equipment for long-term use. This can include payroll tax filing reported (or that will be reported) to the IRS (typically, Form 941); and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported (or that will be reported) to the relevant state. Will this affect my PPP application? According to the Wall Street Journal, it usually takes SBA around one month to process a 7(a) loan. company. If you only have a personal checking account, these lenders will still not accept your PPP application. What is an SBA Express Bridge Loan, and who qualifies? No, payroll costs do not include compensation to agents who are independent contractors. Additionally, per the SBAs Interim Final Rule, sole proprietors must have claimed or been able to claim these expenses as deductible on their 2019 or 2020 IRS Form 1040 Schedule C in order for them to be forgivable when paid with PPP loan proceeds. If the eligible entity has previously applied for EIDL assistance on or before December 27, 2020 but has not yet received an EIDL advance, the entity will be eligible to receive a grant of $10,000. Eligible supplier costs include expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipients operations at the time at which the expenditure was made. First, shop around! To verify payroll costs, you must submit the following documents along with your PPP Loan Forgiveness Application: For sole proprietors without employees, proprietor expenses or owner income replacement can encompass the entire principal of the loan, so no additional supporting documentation will need to be submitted to obtain forgiveness. They may not be used to refinance long term debt. What expenses can I spend the PPP loan proceeds on if I want the loan to be forgiven? By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. SBA express loans are a variant of the SBA 7(a) loan that can be approved faster. Have used or will use the full amount of their initial PPP loan. If your loan was $50,000 or less, then your forgiveness will not be reduced even if you lay off employees or reduce their salaries during the Covered Period. SBA 504 loans are intended for the purchase and construction of owner-occupied commercial real estate, not working capital, and are typically offered at much lower interest rates than 7(a) loans. C.A.R. In 2017, over 6 million homes were sold across the United States, and nearly 90% of sellers used a real estate agent to help them through the process. What should I do? The program provides micro grants ranging from $5,000 to $25,000 to eligible small businesses (including independent contractors and sole proprietors) impacted by COVID-19 and the related health and safety restrictions. Once your application is completed, a loan officer will review the application, with an approval or decline usually sent within days of the application. Some real estate firms offer selling In response to the COVID-19 pandemic, the CARES Act established eligibility for two SBA loan programs: Section 7(a) Payroll Protection Program loans (PPP) and All Applying for an EBL will be done through your lender. f`~5U From March 25 to March 31, there will be another application round where businesses that have not yet applied for a grant will be permitted to apply. Real Estate Agents and Managers If you have additional expenses that will not be forgiven if spent with PPP loan proceeds, an Economic Injury Disaster Loan (EIDL) may be a good option. Thus, if you are a Schedule C filer whose gross income is greater than $150,000 and you apply for a PPP loan, the SBA may send you a Loan Necessity Questionnaire to verify that current economic uncertainty made the loan request necessary to support the ongoing operation of your business. Create an account to follow your favorite communities and start taking part in conversations. Because an EBL loan is a bridge loan, first disbursement of the EBL loan must occur within 45 days of the lenders receipt of an SBA loan number. If you're using thewrong credit or debit card, it could be costing you serious money. Will my PPP loan forgiveness be reduced if I lay off employees or reduce their salaries? ($100,000 12 * 2.5). Agents may qualify for their own PPP loans. The commission is negotiable and is typically split between the sellers agent and buyers agent at 3% each. I need help completing my PPP application. No; however, emergency grant portion does not need to be repaid, $500,000; eligible borrowers can ask for "targeted" emergency grant of up to $15,000, Working capital purposes, including payment of fixed debts, payroll, and accounts payable, "Disaster-related purposes" to support the survival and/or reopening of the small business. We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Real estate agents can use a Small Business Administration (SBA) 7(a) loan to purchase real estate, buy or construct buildings, modernize their facilities, improve energy efficiency, and more. Real Estate Agents and Managers. Since the form is already provided by the borrower at the time the PPP application is submitted, no additional documentation will need to be submitted by the borrower to obtain forgiveness for the portion of the loan used as the borrowers income replacement. After 14 Days it's just $67/month! PPP loans will have a non-compounding and non-adjustable 1.00% fixed interest rate. Use r/TargetedEIDL for advance/grant issues. Tags: hb```f`` P @1V@NTYaR |JRn:Z 3Ap {/#OyCmc.\3YEYYK)pK/a\/X"R%-&iRmR#P%,.3/ :) u8NeHsd"Hv"3]APD3Jt @d(b .H"J6GGa"+@Z%"EC!Qqp(@pM*00^x*Z;hh20j Press question mark to learn the rest of the keyboard shortcuts. You can borrow up to $25,000, which can be used for disaster-related purposes to support the survival and/or reopening of your business. Fill out the form below and a member of our team will get in touch with you. Before you agree to a loan, be sure that you are aware of and understand EIDL loan terms and requirements adequately. Because of the current application backlog, application approvals are likely to be significantly delayed. Most borrowers with employees will also be able to use the EZ version of the forgiveness application, as long as they did not reduce salaries or hourly wages by more than 25 percent for any individual employee during the Covered Period compared to the period between January 1, 2020 and March 31, 2020; AND as long as one of the following is true: (a) They did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period; OR (b) They were unable to operate between February 15, 2020, and the end of the Covered Period at the same level of business activity as before February 15, 2020 due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 related to COVID-19 (or, for a PPP loan made after December 27, 2020, requirements established or guidance issued before the last day of the Covered Period). Press inquiries may be directed to Media Relations. Real Estate Agent Practice Small Business Loans for Real Estate Agents | SBA 7(a) Loans HUD 221d4 Loan, Tue Mar 07 2023 at 10:00 am to 12:00 pm. As mentioned earlier, there are a lot of things that you cannot spend EIDL funds on, including employee bonuses, relocation costs, or loan repayments. Since the definition of payroll costs includes employee salaries, wages paid by an S Corporation will be considered payroll costs that can be covered by PPP loan proceeds. Theres Still Time to Apply with FEMA: Those who have uninsured or underinsured losses can apply with FEMA in one of three ways: online at Click here to read our full review for free and apply in just 2 minutes. While the SBA states that the application can be completed in around two hours, others have stated that it took them around 45 minutes to an hour to complete. has released to the press on the novel coronavirus: March 12, 2020: California REALTORS expect coronavirus to impact housing market. For supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy o invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments. 2030 0 obj <> endobj The CARES Act has created the Paycheck Protection Program (PPP), an expansion of SBAs 7(a) loan program for providing financial assistance to small businesses. SBA 504 loans are intended for the purchase and construction of owner-occupied commercial real estate, not working capital, and are typically offered at much lower interest rates than 7(a) loans. Remaining portions of the EIDL, for purposes other than those laid out as eligible for loan forgiveness under the PPP, will remain a non-forgivable loan. Check with your lender for specific details on how they will accept applications. What should I look out for? The best option is to contact the lender to arrange returning any portion of the loan in excess of what can be forgiven. C.A.R. Copyright, Trademark and Patent Information, An individual who operates as a sole proprietorship or as an independent contractor, A private nonprofit organization that is a nongovernmental agency or entity, Any illegal activity as defined by the federal government, Any activities of a prurient sexual nature, Earning more than one-third of its gross income from legal gambling activities. Eligibility requirements are fairly broad, so chances are good that your business will qualify if designated as one of the following: The 500-employee maximum applies to all the business types listed above. EMERGENCY INJURY DISASTER LOAN (EIDL) APPLY HERE: Application period OPENPAYROLL PROTECTION PLAN (PPP) FIND A LENDER: Application period begins April 10th, Economic Injury Disaster Load Emergency AdvancePayroll Protection Plan (PPP) OverviewPayroll Protection Plan (PPP) Fact Sheet. Please visit some of our family of sites at: On June 17, 2020, the SBA posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act. PPP loan proceeds, EIDL advances, and direct payments from the IRS (e.g., tax refunds, rebates, stimulus or economic impact payments pursuant to the CARES Act) should not be included in gross receipts. However, if you run a larger brokerage that wants to use an SBA loan to purchase (or even build) a new headquarters, an SBA 504 loan could be a superior option. real estate agent's real estate agents All Rights Reserved. C.A.R. Eligible utility costs include payments for a service for the distribution of electricity, gas, water, transportation, telephone, or internet access for which service began before February 15, 2020. However, be aware that many of these lenders will only be accepting applications from customers that have a pre-existing relationship with the lender, and/or the lender will be prioritizing applications from those customers. EIDL loans carry a low interest rate and a 30-year repayment term and can offer a lifeline to struggling small businesses. Real-estate brokers, are you looking for clarity about what help youre eligible for during the COVID-19 crisis? Check with your lender to determine if you will be required to submit a paper version of the certification or if the lender will be offering an electronic certification. Schedule. For businesses established after the second quarter of 2019, the SBA compares revenue from any 2020 quarter to revenue from the third or fourth quarter of 2019. Refinancing business debt: If youve taken out a small business loan to fund your business, and the debt is currently on unreasonable terms (i.e. Between March 2020 and February 2021, SBA provided about 3.8 million low-interest EIDL loans and 5.8 million grants (called advances) totaling $224 billion to help How do real estate firms calculate their maximum PPP loan amount? Normal operating expenses generally dont go on that form unless they are past due, http://sbaloanforms.com/blog/sba-form-2202-schedule-of-liabilities.html. What assistance is available for brokers from the SBA? Pursuant to guidance from the Department of the Treasury, CPAs are not supposed to charge fees for assistance in preparation of a PPP loan application. HUD 223f Loan,HUD 223a7 Loan, If a Schedule C filer elects to use gross income to calculate its loan amount on a First Draw PPP Loan, and the borrower reported more than $150,000 in gross income on the Schedule C that was used to calculate the borrowers loan amount, the borrower will not automatically be deemed to have made the statutorily required certification concerning the necessity of the loan request in good faith, and the borrower may be subject to a review by SBA of its certification. Borrowers can exclude from loan forgiveness calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. EIDL Therefore, it will be more difficult for you to represent that the pandemic itself has had an adverse impact on your business. Small Business Loans Guide: Before You Start. SBA 7(a) loans for working capital and equipment have terms of up to 10 years, while SBA 7(a) loans for commercial real estate loans have terms of up to 25 years. If you only have a personal checking account, these lenders will still not accept your PPP application. Real estate agents WebLearn critical details of the benefits offered to real estate agents including: Unemployment Benefits, Economic Disaster Loans/Grants (EIDL) and the Payroll Protection Program Rupal Shah, Your email address will not be published. You can verify eligibility on the first page of the EIDL application. Step 3: Multiply the average monthly gross income or net profit amount from Step 2 by 2.5. However, keep in mind that all loan proceeds for borrowers without employees can be attributed as proprietor expenses or owner income replacement, and there is no need for these borrowers to attribute any of the loan proceeds to the non-payroll costs category. If you operate as a sole proprietor, you can use the PPP loan proceeds as a substitute for the compensation you would normally receive from commissions. Calculate your average monthly payroll cost and multiply that number by 2.5. Step 4: Add the outstanding amount of any EIDL made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid). From your 2019 or 2020 IRS Form 1040 Schedule C, you may elect to use either your line 7 gross income amount or your line 31 net profit amount. FIND A LENDER: Application period begins April 10th, Economic Injury Disaster Load Emergency Advance. :), Hello! You will need to provide the following information as part of the application process: General information about the business, including EIN (or SSN for a sole proprietorship), Gross revenues for the 12 months prior to the date of the disaster (which SBA designates as Jan. 31, 2020), Cost of goods sold for the 12 months prior to the date of the disaster, Personal and contact information for business owners, Information about where to send funds (bank name, account number, and routing number). Additionally, realtors can use the loan to help small businesses find the funding they need to purchase commercial real estate in the first place. Before taking out a loan, be sure to speak with a qualified commercial real estate broker to discuss all of the risks and benefits associated with this type of financing. If you choose to apply for assistance, work with your lender to apply as soon as possible. And once youre done, you just submit the application and wait for a response, which includes a loan quote. 2021Copyright CALIFORNIA ASSOCIATION OF REALTORS. How to Fill Out the Targeted EIDL Advance Grant - EntreCourier PPP loan proceeds, EIDL advances, and direct payments from the IRS (e.g., tax refunds, rebates, stimulus or economic impact payments pursuant to the CARES Act) should not be included in gross receipts. We are a technology company that uses software and experience to bring lenders and borrowers together. Using line 7 gross income will usually lead to a higher loan calculation, so it will be preferred for most sole proprietors. The first two rounds for applications for the relief grant program were in January and February, and those awarded grants in those rounds were already notified. WebOne Experience. If youre an independent contractor, you may be under the impression that the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program dont apply to you. Checking vs. Savings Account: Which Should You Pick? No contract, cancel at any time. Entities eligible for a supplemental targeted advance will be able to receive an additional $5,000 grant. WebIs SIC code 6531 eligible for EIDL loan? Real estate brokers: Can you qualify for a PPP loan? And Step 2: Calculate the average monthly amount (divide the amount from Step 1 by 12). How will I be able to obtain forgiveness for my PPP loan? What are the risks if I do? How will this affect forgiveness? If you obtain an EIDL loan for more than $25,000, you will need to pledge business collateral to guarantee the loan. This second loan is called a second draw PPP loan.. Members should expect that reporting PPP loan proceeds will reduce benefits for those weeks. SBA EIDL Loans are ELIGIBLE for Rental Properties Will employees need to pay taxes on the proceeds that they receive? 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